Aircel's Chief Executive Officer (CEO) Kaizad Heerjee, in an email sent to employees this week, said the company is under pressure as it has received "no funding for some time and has been dependent on cash generation" from existing business operations.

New Delhi: Soon after reports emerged that India's smallest private mobile operator Aircel is planning to file for bankruptcy amid fierce competition in the sector, the company has warned at least 5,000 staffers to brace for "difficult" times ahead in the wake of "serious funding issues", reported The Economic Times. The company, which had been facing massive call drop issues for the past few months has finally decided to inform its employees that the future of the company is in question, as there little or no funds to sustain operations for long. Aircel's Chief Executive Officer (CEO) Kaizad Heerjee, in an email sent to employees this week, said the company is under pressure as it has received "no funding for some time and has been dependent on cash generation" from existing business operations.

According to the report, the telecom company has been severally hurt by a spurt in competition among new and existing players in the sector, after Mukesh Ambani-led Reliance Jio entered the telecom domain. While other telcos have also been impacted, Aircel has been hurt the most.

Heerjee went on to highlight that the sector is witnessing immense competition amid huge financial stress, adding that Aircel has been impacted by it.

"The company expects things to get even more difficult in coming days,” said Heerjee. To replace the directors who resigned, Aircel has appointed Sandeep Vats, Prakash Mishra and Lakshami Subramaniam, he added. Stating that the weeks ahead will be critical, he said the board will be reviewing and evaluating the options for the company, indicating that it may file for bankruptcy. As of now, Aircel is consulting all its stakeholders and lenders to determine the roadmap.

There are high chances that the company will file for bankruptcy in the National Company law Tribunal soon, ending its run in the market dominated by Airtel and Jio.

“Our financial situation has resulted in network and system outages,” said Heerjee, adding that millions of Aircel's customers have been impacted. The company, which has a customer base of 85 million, is understood to have stopped services in six circles to focus on the better-performing ones.

To put things into perspective, Aircel had reported a quarterly profit of Rs 120 crore in July 2016, before Reliance Jio entered the market. However, soon after its entry, Aircel's fortunes continued to tumble and by the end of July 2017, its profit numbers dropped to Rs five crore and recorded an operational loss of Rs 120 crore in December 2017. Recently, Idea also turned its back on Aircel, with total dues of Rs 60 crore pending for three months.

Another factor that may have further accelerated Aircel's bankruptcy proceedings is RBI's decision to scrap all debt revamp schemes for adherence to the Insolvency and Bankruptcy Code. The decision comes at a time when banks are being plagued with increasing non-performing assets (NPAs), due to a string of bank frauds and willful defaulters.

At least 5,000 Aircel employees asked to brace for 'difficult times' aheadDescription:Aircel's Chief Executive Officer (CEO) Kaizad Heerjee, in an email sent to employees this week, said the company is under pressure as it has received "no funding for some time and has been dependent on cash generation" from existing business operations. Times Now